Cisco Shopping Around the Linksys Division

Back in 2003 Cisco bought Linksys as a way to better their market position and finally break into the mainstream.  For the most part it worked but, as with most corporate take-overs, the parent company alienated the established user base by making it difficult to support older "legacy" devices. (corporate agenda getting in the way)

For instance, say you needed a driver for a Linksys network card.  Normally you would visit the website, click support or products and download the driver you needed.  The only problem was, since your network card wasn't a router or network switch it was no longer supported.  I guess that is one way to obsolete the legacy of the company you paid 500 Million for.

The unit may attract the interest of TV set makers seeking a recognized brand and technology, said the people, who asked not to be identified because the process isn’t public. Linksys is likely to fetch much less than the $500 million Cisco paid for it in 2003 because it is a mature consumer business with low margins, the people said.

Cisco wants to sell Linksys as part of its strategy to exit consumer businesses while expanding in corporate software and technology services. Chief Executive Officer John Chambers eliminated 7,800 jobs over the past year and closed businesses such as the Flip video-camera unit amid a slowdown in sales growth after a foray into consumer technologies backfired.

Most large tech corporations have found money in corporate software and services due to the low overhead and high profit margins.  IBM made the switch already and HP tried to change over but decided their legacy in hardware was too difficult to abandon.  It is only a matter of time before Cisco makes the leap, and with any luck will be stuck dissolving Linksys because I doubt anyone will want to buy it.

Related Web URL: http://www.bloomberg.com/news/2012-12-16/cisco-sai...